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The market for widgets is perfectly competitive with a market demandcurve of: Q =200-(.5)P
There is a single production technology available to firms that choose to operate in the market. The long run total cost function associated with this technology is C(q)=q2 +100
(a) Find the average cost and marginal cost functions for an individual firm. What is the long-run market supply curve in the industry?
(b What is the equilibrium price of widgets? How many firms operate in the market?
(c) Suppose that New Widgets Inc. has just patented a new weidget production technology that results in a long run cost function of
C (q) = 2q2 +80. How many widgets will New Widgets choose to produce at the prevailing market price?
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